After Evergrande, another Chinese real estate developer Kaisa in danger of default
After Chinese real estate giant Evergrande Group faces a delay in repaying its debt, another real estate developer Kaisa Group is at risk of defaulting, raising fears of new problems in the country’s struggling real estate sector.
Shares of Kaisa Group, a developer based in Shenzhen, were suspended in Hong Kong on Friday. The company’s subsidiaries, which have also been suspended from operations, cited a “pending” announcement regarding the group in stock market filings, CNN reported.
While Kaisa did not disclose further details on the reason for the suspension, he had said the day before that he was facing “unprecedented pressure” on his finances.
China’s state-owned financial newspaper Securities Times reported on Thursday that the company informed the outlet about its liquidity problems and admitted that it missed a payment related to its wealth management products.
According to the report, Kaisa said she was facing multiple headwinds, such as a difficult real estate market environment and the recent downgrade of her credit ratings by international agencies, CNN reported.
The news comes as investors continue to worry about the crisis in Evergrande, China’s most indebted developer. The conglomerate has made international headlines since September, after warning it could default on its massive debts of more than $ 300 billion.
Another Modern Land real estate developer is also struggling to pay off debts now. Over the past few weeks, a slew of developers have revealed their own cash flow issues, asking lenders for more time to pay them off or warning them of potential defaults.
Kaisa suffered a setback last week as Fitch and S&P Global Ratings both lowered the company’s rating, citing debt problems.
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